A Project Charter is a high-level document that formally authorizes the beginning of a Project after a feasibility study is done.
To have a Project charter is considered as Industry best practice. This is also known as Project Definition Document.
If you think that you are not doing Project Charter at your project, then you may be wrong as the term may be different at your end like you may be calling it SOW – Statement of Work, Business case, quote, Project Request, Project definition or Estimate Response Document.
Project charter may very short and very intricate. As it is prepared before the planning phase and hence should not have that many details. Five to six pages charter is recommended so that everyone can read it easily.
This could be a word document, a powerpoint presentation, or MS Excel.
Download: Project Charter Template
Purposes of Project Charter:
Regardless of the format you follow, the charter serves the following primary purposes;
- Introduction to the Project: This is created at a very early stage of your project, so you may not have everyone in your team on board at the start so you can send this to let them know about the project. This will help them to understand the project’s purposes well.
- Align Team Approach: Objective, scope, budget, a schedule is clear to all team members once they study the charter.
- Formal Approval to Start: Once you get the project sponsor signatures, it means you are authorized to utilize the resources and get a go-ahead for the planning phase.
Main Sections of Project Charter
A project charter is Objective, not subjective, as it only has high-level details. As it is developed at the early stage of a project where not many features are available.
- Project Description: It contains project ID, Name, and a concise description that what is the project is about.
- Background: Why are we looking to have this project? For example, the purpose of this project is to develop a City Mall in the hub of Sharjah UAE. As there are business opportunities are increasing, and hence the demand for ex-pats are increasing. This is a serious concern as there is much rush in available Malls, and therefore the company has decided to get more areas to facilitate all the resediments of Sharjah.
- Project Scope: A high-level attributes of the end product, services, or transition. Here, you will find the boundaries to work for. It will help to avoid gold plating and scope creep. Let say you are building a City Mall, and to market, it later is not your scope, then makes sure to list it in your scope section.
- Objectives: Project objectives should be measurable. It means at any stage of a project, you can prove that your team has met the goals. An increase in sales is not a good objective instead of a 50% increase in sales than the previous fiscal year 2018 makes sense as it is a measurable one.
- Governance: Who is who to the project. Here, you will include the Project Manager, the sponsor, and significant team leads of the project.
- Milestone Schedule: The key milestone date should be included in this section. These dates may merely guess sometime at the start. It’s good to have a general understanding so that the team knows when a phase should be completed.
- Project Budget: This section has the total budget of the project and a high-level cost breakdown. It should be according to the fiscal year or as per your organization’s norms.
- Assumptions, Dependencies, Constraints, & Risk | Detail below
Assumptions: An assumption is an event that a project team is expecting to happen during the project like your company is expecting to install Primavera P6 after 6 months, which will help you to generate reports to track the project in execution phase better mainly. For this, you don’t have any proof then it is going to happen or not.
Constraints: A constraint is a limitation on the project like you know triple constraints, cost, schedule, etc. You must do your job by following these limitations for the successful completion of the project. And you have to work within the boundaries restricted by these constraints. All projects have constraints, which are defined and identified at the beginning of the project.
A constraint could be Technical Constraints like you should test drainage line network of a Road at 4 bar pressure and firefighting network at 14 bar.
Dependencies: Thinks that should have done before the project obtains its objectives. For example, surrounding Roads and Parking of a Residential Tower should be completed before its completion.
Risks: Anything that comes on your way while delivering the objectives. For example, if you are building the Mall in a seaside area where a tsunami may hit the project.
- Signatures: Project Sponsor should formally sign the charter, and project Manager signatures should be included.
Who should develop the Project Charter?
As a project manager, you should not sit in a separate room and just draft the charter and get it signed by the sponsor. Rather, you should call the team and the sponsor in a meeting room. Let everyone participate, do brainstorming, and you will not everybody has the same perspective. This way, you will see that everybody is aligned at the end. This we call a buy-in. This is much more important than the document itself.
Once the meeting is done, get to your desk draft and send it again to the participants for the feedback to see if something is to change. Finally, send it to the sponsor to get it signed. Both you and the sponsor should sign the charter.
Hence, the project charter a contract between the project sponsor and project management. It empowers the project manager to deliver.
Project Charter can be revised during the project life cycle.
A project charter is not just a document; it contains the most essential facets of your project. An excellent concise project charter is the one on tips of your team members. The initial stage is the most important as it laid the foundation for a successful project. A charter definition is taken to get everyone on the same board. It helps to find Reference of Authority.
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